Gold futures declined on Friday after a stronger-than-expected October jobs report, prompting prices for the precious metal to end the week with a modest loss.
Gold for December delivery GCZ8, -0.36% fell $5.30, or 0.4%, to settle at $1,233.30 an ounce. It ended the week roughly 0.2% lower, according to FactSet data. On Thursday, gold settled at a more than three-month high, up 1.9% as the U.S. dollar weakened, boosting demand or the dollar-denominated precious metal.
December silver SIZ8, -0.12% meanwhile, finished Friday with a loss of 2.1 cents, or 0.1%, at $14.756 an ounce after rallying by 3.5% Thursday. It still scored a 0.4% rise for the week.
The U.S. economy added 250,000 new jobs in October, topping the consensus forecast of 208,000, while the unemployment rate was unchanged at a 48-year low of 3.7%. Average hourly earnings saw 12-month growth accelerate to 3.1% from 2.8% in September.
Analysts had warned that a strong October jobs report could weigh on gold as it would underline expectations the Federal Reserve will continue to raise interest rates at a steady pace, lifting Treasury yields and the dollar. Higher bond yields can also be a headwind for gold and other commodities since the latter doesn’t offer an income stream.
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +2.61% was up 6.2 basis points at 3.201%, while the ICE U.S. Dollar Index DXY, +0.21% which measures the currency against a basket of six major rivals, was up 0.3% at 96.542 as gold prices settled.
Analysts were also discussing Wednesday’s third-quarter update on demand trends from the World Gold Council, which showed strong central bank purchases and increases in consumer appetite but growing supply and weak investment flows.
Christopher Louney, analyst at RBC Capital Markets, noted that October, the first full month of the fourth quarter, saw a recovery in physically backed gold holdings by exchange-traded products, which rose by more than 20 tons overall.
On Friday, however, the SPDR Gold Shares ETF GLD, +0.01% shed 0.1%, looking to end the week with a loss of 0.2%.
“With such uncertainty around the mid-terms on Tuesday” and the Fed’s monetary-policy meeting next week, “gold is taking a pause after its best winning streak since January,” up four weeks running based on the Friday PM London benchmark, said Adrian Ash, director of research at BullionVault. The central bank will wrap up its two-day policy meeting on Thursday.
“But the more significant event for prices next week might be Diwali in India,” Ash said. “Now the metal’s No. 2 consumer nation is reaching its peak demand season with prices near six-year highs (thanks to the sinking Rupee). That’s badly hurting gifting and investing among the world’s wiliest gold-buying households.”
In other metals trade, January platinum PLF9, +1.25% rose 1.5% to $875.70 an ounce—up about 5% for the week, while December palladium PAZ8, +1.90% gained 2.1% to $1,104.50 an ounce, tacking on roughly 1.7% from a week ago. December copper prices HGZ8, +3.49% jumped 3.1% to $2.807 a pound, ending the week up 2.4%.
